Financing and Monetary Assistance for Aussies After Covid-19
Following the lifting of the coronavirus lockdowns, people across the country are now slowly going out of their homes while businesses are also starting to reopen. With the slow return of life to pre-Covid times, many still feel uncertain to start life anew, especially those who have lost a job or a business and have an active loan to repay.
It can be remembered that in March, a number of financing and monetary assistance programs have been handed to both individuals and businesses alike to help them survive the COVID-19 challenges.
Which of these financial assistance services are still accessible today? Let’s take a look.
For Businesses: $150,000 Instant Asset Write-Off Threshold
Introduced on 12 March 12, 2020, and originally set to end on 30 June 2020, the instant asset write-off threshold was increased from $30,000 to $150,000 to allow more businesses to claim tax deductions on purchased assets.
Apart from the increased threshold, more businesses have also been made eligible for the program with the inclusion of those with an aggregated turnover of less than $500 million (originally capped at $50 million).
On 9 June 2020, the government has announced the extension of the $150,000 instant asset write-off until 31 December 2020. The proposed expansion, however, is still in legislation.
Businesses who are yet to buy a commercial vehicle and office equipment or machinery before the year ends can still take advantage of this scheme. The threshold applies on a per asset basis, which allows eligible businesses to immediately write-off multiple assets.
For Businesses: Temporary Financial Relief
Business owners or directors who are struggling to keep their business running because of the coronavirus pandemic will be assisted by the ATO with tailor-fit solutions, such as:
- Temporary reduction of payments or deferrals
- Withholding enforcement actions, including Director Penalty Notices and wind-ups
For Early Childhood Education and Care Services: Transition Payments and Child Care Subsidy
Early childhood education and care services have been provided for free for almost three months. However, it will end on 12 July 2020.
From 13 July to 27 September 2020, these institutions will receive Transition Payments and Child Care Subsidy.
For Businesses: JobKeeper Initiative
This is a wage subsidy from the Government that helps business owners continue paying their employees regardless if they are able to work or not.
Eligible businesses will receive $1,500 per fortnight per eligible employee for up to six months (27 March to 27 September, 2020).
Self-employed individuals, including tradies and entrepreneurs, are also eligible for the payments.
However, employees of child care subsidy-approved service providers and sole traders operating a child care service will no longer receive JobKeeper payments starting on 20 July 2020.
For Employers: Cashflow Relief
Small or medium business owners with staff, as well as those who run non-profit organisations and charities, can apply for a maximum payment of $100,000 and a minimum payment of $20,000 to help with the operation, bills payment, and employee salaries or wages.
For Employers: Wage Subsidy for Apprentices and Trainees
Employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the nine months from 1 January 2020 to 30 September 2020.
For small business owners who are not able to retain an apprentice, the subsidy will be available to a new employer.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee.
Registration for this program commenced in April 2020. Employers have until the last day of the year to lodge their final claims for payment.
For Individuals and Sole Traders: Early Access to Superannuation
Aussies who have been laid off, redundated, or reduced in working hours by at least 20% and are still under financial stress due to the coronavirus crisis can access up to $10,000 of their super before 1 July 2020 and a further $10,000 from 1 July 2020 until 24 September 2020.
Sole traders whose business was suspended have experienced a reduction in a business turnover of 20% or more are also eligible for the program.
The ATO has started accepting applications for the program since 20 April 2020 via myGov.
For Retirees: Reduced Minimum Pension Payment
The minimum pension payments retirees are required to withdraw from their account-based pensions or a similar product has been reduced by 50%, as follows:
- 65 years old and under 4% to 2% default minimum drawdown rates
- 65-74: 5% to 2.5%
- 75-79: 6% to 3%
- 80-84: 7% to 3.5%
- 85-89: 9% to 4.5%
- 90-94: 11% to 5.5%
- 95 and older: 14% to 7%
For Individuals with Income Support Payments: Coronavirus Supplement
This financial assistance is a taxable $550 fortnightly payment until 27 September 2020.
The payment has been automatically paid since 27 April 2020 to people who are receiving the following income support payments:
- Parenting Payment
- Wife Pension
- Jobseeker Payment
- Youth Allowance Jobseeker
- Partner Allowance
- Sickness Allowance
- Special Benefit
- Widow Allowance
- Farm Household Allowance
For Individuals with Income Support Payments: Tax-free Lump Sum Payments
The first Economic Support Payment is a one-off payment of $750, which is awarded to eligible individuals who were in Australia between 12 March 2020 and 13 April 2020.
The second Economic Support Payment is also $750, which will be awarded to eligible individuals on 10 July 2020. However, it is not provided to those who have already received a Coronavirus Supplement.
Eligible for a first lump sum and Coronavirus Supplement are individuals who are receiving:
- Parenting Payment
- Wife Pension
- Jobseeker Payment
- Youth Allowance Jobseeker
- Partner Allowance
- Sickness Allowance
- Special Benefit
- Widow Allowance
- Farm Household Allowance
Eligible for the first and second $750 lump sums are people receiving:
- Age pension
- Disability support pension
- Carer Payment
- Widow B Pension
- ABSTUDY (Living Allowance)
- Austudy
- Bereavement Allowance
- Newstart Allowance
- Family Tax Benefit (includes Double Orphan Pension)
- Carer Allowance
- Pensioner Concession Cardholders
- Commonwealth Seniors Health Cardholders
- Veterans Service Pension; Veteran Income Support Supplement
- Veteran Compensation Payments (includes lump sum payments)
- War Widow pension, and Veteran Payment
- DVA PCC holders
- Disability Pensioners at the temporary special rate
- DVA income support pensioners at $0 rate
- DVA Gold Cardholders
Centrelink automatically allocates the payments based on each individual’s eligibility. Application is no longer needed.
For Individuals: More Income Support for 6 Months
From 27 April to 27 September, 2020, the government provides the following additional income support:
- Waived asset test for Jobseeker Payment, Youth Allowance Jobseeker, and Parenting Payment. The income test will continue to apply to the other payments received
- Waived one-week ordinary waiting period, liquid assets waiting period, seasonal work preclusion period and newly arrived residents waiting period. Income maintenance periods and compensation preclusion periods will continue to apply.
For Pensioners: Reduced Deeming Rates
Since 1 May 2020, the upper deeming rate for income in excess of the income threshold has been reduced from 3% to 2.25%, and the lower deeming rate from 1% to 0.25%.
- Single: 0.25% on first $51,800 ($129.50), 2.25% on amounts exceeding $51,800
- Couples (Combined): 0.25% on first $86,200 ($215.50), 2.25% on amounts exceeding $86,200
Pensioners who are receiving part pensions and less than the full rate of income support can also receive increased entitlements.
For Homeowners: $25,000 Grant
Eligible owner-occupiers earning up to $125,000 annual income (singles) or $200,000 (couples combined) including first home buyers are eligible for a grant of $25,000 to build a new home or substantially renovate an existing home, including kitchens and bathroom work at a principal place of residence.
Application is possible for the program if the relevant State or Territory Government that homeowners live in or plan to live in signs an agreement with the Commonwealth Government.
For WFH Employees: Tax Deduction
Employees who are working from home and have incurred expenses directly related to WFH setup that are not reimbursed by their employers can claim them as a tax deduction.
Working from home hours and expenses must be recorded to serve as proof. To calculate additional running expenses, visit the ATO website.
Aussie and Proud of It, Mate!
The coronavirus pandemic has undoubtedly caused economic disruptions that affected both businesses and individuals from all walks of life. However, it is comforting to know that plenty of financial assistance programs are available, not just for the poor but for all the hardworking citizens who keep the national economy afloat.
Truly, to live in a country that is capable of keeping its people secure in times of crisis is something to be proud of.